Vermont could clear way for new emissions rules

By Scott Malone

BOSTON (Reuters) - A Vermont judge could soon clear the way for nearly a dozen states to surmount auto industry protests and limit emissions from cars and light trucks to protect the environment, legal experts said.

The rural northeastern state in 2005 followed California's lead in calling for a 30 percent cut in the amount of carbon dioxide, the main gas blamed for global warming, emitted from automobiles starting with 2009 models. U.S. automakers have sued both states, and Rhode Island, seeking to have the rules overturned.

Vermont's suit is the first to go to trial.

Arguments wrapped up on Tuesday after nearly a month of testimony, and legal experts expect U.S. District Court Judge William Sessions to rule before September.

"This will be an important signal to the other cases, so I do anticipate that there will be an important precedent set in this case," said Daniel Esty, the director of Yale University's Center for Environmental Law and Policy.

The Vermont trial began shortly after the U.S. Supreme Court ruled in an unrelated case that carbon dioxide can be regulated as a pollutant, rejecting a 2003 argument by the federal Environmental Protection Agency that it did not have authority over carbon dioxide.

That finding, legal experts said, weakened the auto industry's argument that the 10 states that have adopted the rules are overreaching in regulating carbon dioxide emissions. Fuel efficiency is federally regulated.

"I expect Vermont to win, and I think the deference shown to the states as sovereign entities by the Supreme Court recently sends a strong signal to this court that it needs to be very deferential to Vermont's desire to protect its air," Esty said.

However, Patrick Parenteau, director of Vermont Law School's Environmental and Natural Resources Law Clinic, said Sessions could dismiss the suit or simply delay ruling until the EPA takes up the issue.

"The probability here is that he is not going to issue any groundbreaking ruling," Parenteau said. "It's not a decision he has to make and it's not a decision he should make."

FEASIBILITY

Automakers General Motors Corp. and DaimlerChrysler AG, with local auto dealers and trade groups, said they could not meet the Vermont standards and would be forced to stop doing business in the state as a result.

"I seriously doubt that if you gave me all the money in the world and the same for all the other automakers that they could find enough resources ... to do this work," Bob Lee, a vice president at DaimlerChrysler, testified in April.

Vermont, whose farm and tourist industries depend on cold winters and mild summers, said the standards were realistic and crucial for maintaining a stable climate.

"They have some years, because they don't even start until 2009 at the earliest and then slowly ramp up, but it's a matter of committing to it," said Brad Kuster, an attorney at the Conservation Law Foundation, an advocacy group assisting Vermont and California on the legal issue.